The aim of the study was to investigate whether children with Specific Language Impairment (SLI) show reduced left hemisphere specialization for language and, if so, whether it is associated with a deficit in phonological encoding and a specific type of SLI (Mixed Receptive-Expressive, Expressive, Phonological). We adopted two dichotic listening paradigms, which differed in the phonological similarity of the presented words (Fused and Non-Fused dichotic words tests), as well as a phonological working memory test. Participants included 34 pre-school and school age children affected by SLI. On the dichotic tests, as a group the children with SLI showed a reduced pattern of left hemisphere specialization for language compared to age-matched normal children, with significant differences only in the Fused condition. However, the pattern of hemispheric specialization varied depending on the type of SLI, with reduced left hemisphere specialization in the Expressive type and, to a lesser extent, in the Phonological type of SLI, but not in the Receptive-Expressive type. The three subgroups also differed in phonological processing abilities and the incidence of a positive family history for language disorders: the Receptive-Expressive group performed worse on the working memory and dichotic tests and the Expressive and Phonological groups presented high frequency for familial language disorder. These results suggest that different subtypes of SLI are not different manifestations of the same underlying disorder, but represent pathological conditions that have distinct markers both at the behavioral and neurofunctional level.